The abbreviation SIP stands for Systematic Investment Plan. This means that several investors get together and contribute to a mutual fund by depositing their respective amounts in a regular, systematic manner. This frequency can be weekly, monthly, or quarterly. In order that you get very good returns from your mutual fund, it is essential that you do due diligence in finding out the right mutual fund and also contribute your share regularly. This article will guide you to invest in your SIP plan online. But why invest in a mutual fund online? Because data suggests that more and more number are discarding the old traditional route of filling forms and adopting the internet for their investment decisions.
Investing in best SIP plans online
- Identify your objective- Firstly, identify the reason behind your SIP investment decision. Do you want to accumulate enough money to fund your child’s education, or arrange funds for your daughter’s marriage? Are you considering buying a house? Once you have identified the objective, do some rough calculations and arrive at a ballpark figure for the funds needed.
- Becoming KYC compliant- It is necessary to supply one’s personal details online while applying for a mutual fund online. KYC means ‘Know Your Customer’ and every mutual fund would insist that you supply your details to it. These are your name, address, date of birth, Permanent Account Number, and documents that verify these details. You need to self-attest those documents and upload them on the portal of the mutual fund company. You may be visited upon by a representative of the company to ascertain your information.
You can also furnish your details by giving your Aadhar Card number to the website. By doing so, you will get a One Time Password on your mobile. Write that number in the required field on the form and you are done. Please note that giving Aadhar details is not mandatory.
Another thing that is important to be noted is that once you have submitted your KYC details online, you don’t have to repeat that process. Submit your details on Karvy, CAMS and a few other eKYC portals.
- Identify and then invest- Once you have submitted your details, the next step is to identify those mutual funds that fulfil your objectives. An important part of this activity is to discover your risk appetite. This means finding the level of your potential losses. It doesn’t mean that you will necessarily lose in the fund you chose; all we are saying is that there might be some losses in your investments and you should be prepared for them.
Once you have identified your best SIP plan, the next step is to start investing in it. If you can afford paying your contribution on a regular basis, then it is time you opted for that plan.
- How to buy mutual fund online? You can buy your SIP plan either directly or through a mutual fund advisor. Both of them have their own benefits.
In the case of a direct buy, you can choose just one plan at a time. You will have to repeat the process when you buy a fresh new product from another mutual fund. You also save the brokerage fee in this process. But this process is a bit tiresome as you will have to remember the PIN numbers of each fund every time you visit your various mutual fund accounts.
Buying a mutual fund through an advisor or a brokerage has its own advantages. Firstly, you can opt for multiple funds at the same time. Secondly, your advisor will guide you to the right fund based on his experience. Of course, you will have to pay a certain brokerage fee to your broker or advisor while buying a mutual fund.
There is a third way of investing in mutual fund and this method combines the advantages of a direct buy and going through brokers. You can buy your mutual fund online by creating an account on one of the several independent portals. These platforms charge you zero fees but offer you a lot of information on the performance of your chosen fund. They have professional relationships with banks so transacting through these independent portals should not be a hassle.
- Create a netbanking account- You can’t buy or sell your mutual fund units unless you have a netbanking account. For this, you will have to apply for one with your bank. You will also have to link your mobile number to this account so that you can validate your every transaction.
For more information, you can click on the given link https://www.orowealth.com/insights/blog/best-sip-plans-to-invest-in-2018/ and know more about the best SIP plans.